Vast Majority Of Swiss Reject $25 Minimum Wage In National Referendum

If you want a country that respects free markets, believes in listening to the voice of the majority, and is against meddling in global affairs under the guise of "humanitarian, liberating, and democracy-spreading" intervention, move to Switzerland.

If you want a country controlled by a few academic central-planners with no real world experience, in which the executive usurps power issuing one executive order after another with zero checks and balances, and which will incite a global war if it must with the help of doctored YouTube clips in order to achieve its global national interest, then move... anywhere else.

Six months ago, it was this same Switzerland that, contrary to the prerogatives of the pervasive "fairness doctrine" taking the new socialist world by storm, rejected imposing limits on executive pay. Then mere hours ago, in a move that would give president Obama wealth redistribution nightmares for months, a whopping 77% of Swiss voters rejected an initiative for a national minimum wage of 22 francs, or just under $25, per hour, according to projection by Swiss television SRF. And confirming that when it comes to anti-socialism, Switzerland may well be the last bastion, not a single canton supported the measure.

How dare Switzerland not pretend supply and demand doesn't matter and one can circumvent the laws of common sense and enforce employment and wages by diktat? Simple: Government ministers have fought against the measure and insisted it will damage the economy, running small companies out of business and making it harder for young people to find employment. Perhaps it is time for these same minister to give the US government a few lessons.

Initial results suggest that the Swiss have rejected a referendum proposal to create the world's highest minimum wage, an idea that government and business leaders criticized as likely to drive Switzerland's high costs even higher.

Swiss TV reported Sunday that 77% were rejecting the proposal to create a minimum wage of 22 Swiss francs ($24.70) per hour, based on unofficial vote tallies. Official results were expected later Sunday.

The proposal would have eclipsed the existing highest minimum wages in force elsewhere in Europe. Trade unions backed it as a way of fighting poverty in a country that, by some measures, features the world's highest prices and most expensive cities. But opinion polls indicated that most voters sided with government and business leaders, who argued it would cost jobs and erode economic competitiveness.

AP also adds the following tart pearl: "Referendums are a regular feature of democracy in Switzerland, which features a weak central government and strong state governments."

Meanwhile elsewhere, such as the Eurozone for example, merely hinting at a referendum is enough to get the abovementioned central-planners blow up your bond market and get your thrown out if not facing a firing squad (see G-Pap and Berlusconi).

So congratulations Switzerland for being one of the last bastions of democracy and having your voice heard, even if we, for one, wholeheartedly agree with your choice that free markets trump "fairness" and wealth redistribution every time.

Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea.

Let us look at the economic side of things first: for one thing, the law of supply and demand is not magically suspended when it comes to the price of labor. Price it too high, and not the entire supply will be taken up. Rising unemployment inevitably results.

However, there is also a different way of formulating the argument: the price of labor must not exceed what the market can bear. In order to understand what this actually means, imagine just for the sake of argument a world without money. Such a world is not realistic of course, as without money prices the modern economy could not exist. However, what we want to get at is this: workers can ultimately only be paid with what is actually produced.

As Mises has pointed out, most so-called pro-labor legislation was only introduced after enough capital per worker was invested to make the payment of higher wages possible – usually, the market had already adjusted wages accordingly.

However, unskilled labor increasingly gets priced out of the market anyway, which is where the ethical argument comes in. If a worker cannot produce more than X amount of goods or services, it is not possible to pay him X+Y for his work. Under minimum wage legislation he is condemned to remain unemployed, even if he is willing to work for less.

* * *

The first salient point is the fact that once this new minimum wage law is introduced, upward pressure on all wages would likely ensue. Note in this context that Switzerland is awash in newly created deposit money due to the ministrations of the SNB, which is manipulating the Swiss franc's exchange rate (a few charts on Swiss monetary inflation over recent years can be seen in our article 'How Safe is the Swiss Franc?'. The article is slightly dated, but it still serves to illustrate the point). So there is no brake on prices and wages due to a lack of money supply inflation – rather the opposite. Naturally, wages would not be the only thing rising under these circumstances – prices would be adjusted accordingly, and in the end the purchasing power of the higher wages would not be greater than before.

The second important point is the one about which enterprises would suffer the most on account of such legislation. When the union official cynically comments that 'only businesses that cannot be outsourced will be hit' (i.e., those who cannot vote with their feet and simply flee), he forgets to mention that small and medium-sized companies as a rule cannot 'outsource' their operations either, almost regardless of what they are producing. We felt reminded of something a friend of ours mentioned to us recently: “The problem of today's form of capitalism is that there are not enough capitalists:”

Indeed, an individual entrepreneur running a small business has a very difficult life already, as every new imposition is much harder to overcome for a small business than it is for a large corporation. This is also why we often find that big corporations don't resist new regulations: they reckon they are likely to keep competition from upstarts at bay. It is laudable that several big Swiss corporations are evidently not following this trend.

If Swiss voters agree to introducing a new minimum wage law, they would end up doing incalculable damage to Switzerland's entrepreneurial culture. At the moment, Switzerland is still one of the freest economies in the world. It has been extremely successful so far and its achievements would clearly be put at risk. Hopefully Switzerland's voters won't be swayed by union's arguments.

So congratulations Switzerland for being one of the last bastions of democracy and having your voice heard, even if we, for one, wholeheartedly agree with your choice that free markets trump "fairness" and wealth redistribution every time.

Switzerland is basically the exact opposite of a libertarian fantasy-land and a true democracy - yes. And xenophobic? Check. Probably a little more justified than most places though.

What do you want us to do, big markets threaten to retaliate economically and we have no allies left. Those markets are vital for our exports, they have all the leverage in the world. There was a time when Luxembourg and Austria had converging interests with us. On the substance, it is certainly a shame that those governments use force on the international stage to mask what are inefficiencies at home. This is a losing stance in the long run.

I am all about banking secrecy but let's save what we still can; banking secrecy domestically such that our government remains weak in regards us.

De minimis. I would extend Bank Secrecy for eveybody, it is an important asylum aspect to have our own wealth (Gold/Work) stored in a secure place out of reach from predatory governments that think we are indentured slaves.

Unfortunately our central bank has become just as keynesian as the BoE or the Fed. The people were manipulated into accepting (in 2001) a modification of the constitution to remove the gold clause, following adhesion (in 1992) to the IMF (whose charter explicitely prohibits using gold to back one's money supply).

There was a referendum to remove that clause (and sell 1/3 of national gold holdings). People were manipulated in believing gold is an anachronistic barbarous relic. Now there is a referendum initiative to reintroduce it.

Yes, but conscription is mandatory unlike most nations in Europe because the Swiss are firm believers that a person isn't a citizen until they contribute part of their lives to the common welfare of their country. It's not a big place, it produces very little...except people. So when you are a country as over populated as Switzerland if measuring the resource requirements contrary to it's output (which is banking...aka nothing of merit). So instead you use the only resource anyone that can offer to sell from a government standpoint.

Warm bodies. All to be deployed in numerous long term mercenary arrangements with other european states for hundreds of years. Just think of it as a banking and pimping operation disguised as a country, because that's all it's ever been and all that government is built to accomodate.

Kind of sad that people are proud of that and it comes with a terrible price because of it.

Game on...just a reminder there's no uhaul behind the hearse in those conditions. Ever.

I would not mind 2 year mandatory conscription for a true national DEFENSE force like the Swiss have. The Swiss hired out as mercs in the middle ages, I'm not aware of them doing so in the last 200 years or so, besides the token Vatacan force that is the only one left since 1859 according to wiki. We are talking about recent history here.

You could easily make it where you could opt out, but then have opt out your voting privielges and access to social welfare programs for life.

"You could easily make it where you could opt out, but then have opt out your voting privielges and access to social welfare programs for life."

Perfect! Sign me up. I haven't voted since 1992 anyway. And as long as I can opt out of compulsory taxation to fund social welfare programs like Medicare, Social Security et al I'd be glad to opt out of receiving those benefits.

Conscription is slavery. Period. You can frame it anyway you want but mandatory service to an oligarchy and its military industrial complex to line their pockets while serving as cannon fodder is just another form of slavery. Screw the Swiss. Israel too and any other country that forces people to serve its military.

Once used to guard prominent Royal Courts, mercenaries hailing from Switzerland had a notorious reputation for fierce loyalty, optimal combating skills and unequalled discipline. While many Swiss Guards regiments existed in Europe since the mid-15th century, the Papal Order is the only one still in existence.

that's just a teaser link, I'm sure others here can contribute some red meat on this subject. . .

Few Americans realize Switzerland and the US are sister republics. Our 1848 constitution was modeled against the US constitution. Only we didn't have a civil war, and thus the central government didn't grow as fast (but has been growing nevertheless, unfortunately). André de Gallatin, the US first treasury secretary, a personal friend of Jefferson, who helped write the US constitution, was from Geneva.

There's something else: although democracy is no panacea, still, direct democracy in Switzerland forces people to reach consensus; when you have to reach a consensus about a proposed legislative disposition, ideologies cancel out, and only the perceived (and objective) effectiveness of the law/policy remains. Hence it is still a (relatively) classical liberal country.

PS: did you know Switzerland is the country with the most firearms per inhabitant? More than Yemen. More than Afghanistan. More than the USA.

Another town that's nice in that part of the world is Lucca in Italy. Friendly people and it has not attracted the crowds of immigrants (Arabs/N Africans) some other places have. Sardinia (outside of their main city) is also nice in the smaller towns (like Norbello). I get to visit my sister when she works in these places as an archeologist. She said NEVER go near the larger EU cities where crime is out of sight now. Even Perugia is a mess I read.

Her pay stinks but she leads a wonderful colorful life and travel all the time.

The Free State Project Europe (a copycat of the american Free State project), has chosen the canton of Ticino for people to relocate to!! Beautiful region indeed. Ticino is likely the canton that will secede first, if the SNB continues attacking the Swiss Franc, and whenever shit hits the fan. I live in the Sopraceneri, and I've never met people with such a sovereign spirit. They're unlikely to accept Bern's diktat for much longer. There's even a valley around here that has refused electricity (to safeguard the landscape), fought the federal government in court, and won.

I have a brother who is a chef is Switzerland. He loves it and is never coming back to the USA. He is coming up against the long arm of the US tax laws in Switzerland. The United States unlike even the most socialist of Europeans follows you everywhere. I suggested that he find a way to renounce citizenship for his kids if not himself. The IRS will clearly remind you that you are in fact, property of the U.S. government...or subjects of the State.

Having said that, Switzerland is not a free market paradise. It is insanely expensive there. If you make $100k, US you are lower middle class. They have lots of protectionism for goods and services. It is also the playground for the richest people in the entire world. The lifestyle is a throwback to long traditons. Most towns are still small with separate local butchers, grocers, drug store, etc. They have some far more rational systems when they do collectivism. Their state retirement system has two parts. One part is like our Social Security system and is a flat contribution and redistributed. The larger part is a part invested and specifically owned by you. It is mandatory but you have a property right and it is quite good. Perhaps there are some Swiss citizens who will comment further.

While I am libertarian and opposed to all statism and collectivism I do recognize that many European countries much better and more practical models than what we attempt here in the "free" USA. However, they are also managing land areas and populations that are only the size of a single state in the USA.

However keep in mind that those welfare recipients are de facto the most visible. Plenty of foreign qualified folks working while those pieces of shit touch their pension and enjoy asylum by hanging by the lake. In other words, non-representative sample.

I'm in the US; and I've been trying to get an IT Contract(in the strictest sense - not a FTE Job) there; and take some Masters Level Courses there for Years!!!

Yet, most IT Recruiters I've corresponded with are just concerned with people who already have Work Visas - which is expected; but with my Hourly Rate Range(Project Manager/Mgmt Consulting/BSA for ERP/BI/Financial Systems), recoupment of Permit Fees should take place well within a Month.

Most of these projects take 3-12 Months and extend longer. I understand that it takes awhile for a Visa App to go through; but when there's a demand for Tech/Skilled Human Capital, things should get processed quickly.

As for Language requirements - I studied some French; and am willing to learn German as well. However, for most Multinational Firms present in CHE, English should work.

Anyone in the USA have any luck working as a Contract/Project Consultant in CHE, DEU, SWE, or other Tech savvy EU Countries? I appreciate any names of Recruiters and Contract Agencies who work well with US Expats.

Figure some of the present ZH Readership may be interested in Expat Living. For all the Intrusive Cult Neocons, Faux-Patriot-Chickenhawks, Draft Dodgers, and Parasites out there - I've already Served my Country; and have EVERY RIGHT to seek viable and legal forms of Work and Residency for my Career and Business in any Country we're not "At War" with - so mind your own.

Well maybe the electorate will take the Senate from Reid in November. The most destructive force to our republic has been the Supine Court making 5-4 decisions green lighting shit King George would not have done to the colonists.

If democracy then the way of switzerland, where at least one has a chance to vote down your choosen politicians. How far away from that are we here in Germany and how far away are the US from it. Here in Germany there is a higher chance a snowball survives the summer than that we get rid our current government.

The press has turned into a propaganda machine ensuring the masses kept uninformed about the important stuff negotiated behind closed doors and kept in 'confidential' documents.

This press endorses the puppets that are aproved by TPTB, has them lined up and makes sure not to mention those who represent a treat to the club, or in best case poses them as 'populists' if they have managed to get attention despite the media block.

Then the puppet that is best at lying with a straight face is 'elected'. When elected these puppets do exactly the oposite of what they promised, nobody can stop them untill next election. This is anything but democratic. But worst of all the real power, comes from the unelected commision which makes +80% of the laws and controls the budgets of the 'nations' in EU.

So anybody with half a brain should see, democracy is an illusion created to keep the masses calm.

On another note, if one speaks with average Joe on the street, one gets to wonder if real democracy could be even worse... Suppose those ignorant uneducated sheep get to decide over matters they don't know anything about..

It's a dilemma..

Only thing I know for sure is, we need a fair base: sovereign money instead of money created by private bankers as a debt to them..

And now you know why the IRS is all over Swiss banks to disclose the accounts of American Citizens, with all proceeds fully taxable (plus penalties and interest). We WILL knock Switzerland off it's high-and-mighty free market capitalist horse. How dare they adhere to our Constitutional principles more strongly than we do.

What a coincidence, all this while the Swiss federal government turned CS over to the IRS for a thourough ass raping and has all but participated in the destruction of the fundamental right of financial privacy.

I do not share your optimism. CH would fold again like a Chinese lawn chair , all US has to do is threaten them with exclusion from SWIFT. I bet that was the leverage that was used in the CS tax dodge affair.

Yeah, $25/hour minimum wage is too much for the debt serfs. They might just begin to lift themselves from the breadline and not be living paycheck to paycheck, in fear. Not to mention that old chestnut - the velocity of money.

Course Australia, with the highest minimum wage and 5.8% unemployment is a bad example. Next highest minimum wage is Luxemberg and they have 5.9% unemployment. Terrible!

Next is Monaco, I don't think they know what an unemployment line is, lol. Next is France with 11%, Belgium with 9%, New Zealand with 6%, San Marino at 7% and 5/6 other countries before you get to the US's $7.25/hour.

Wrong, we have sectorial conventions produced out of unions and owners bargainings. Overall they cover half of the economy and some contain negociated minimum wages - reflecting workers' productivity in a given sector.

We do not have public minimum wages except for two cantons (Jura, Neuchâtel).

Why do you think the vote was against a national minimum wage? I'm curious as many countries have one. Could it be because the unemployment benefits are so generous and the government gives so much help in re-training and getting you back into work?

- No point in changing a proven winning system of sectorial conventions - and apprenticeship (what's the point of doing one if, provided you get a job which will be tougher as a youngster, you get 4k?).

- Highest minimum wage in the world, double that of the second, and so;

- Would have hampered the SMEs' competitiveness which are the cornerstone of our industry.

- Would have downright destroyed jobs in low-skilled sectors and increased prices (agriculture/restauration/barber/..)

- Would have brought foreign workers at the expense of youth employment.

Worked well in the debates. The proponents' arguments were weak; "you are painting the devil on the wall, it will be alright!", "studies do not demonstrate those adverse effect!", "300k of working poors making between 3k and 4k!" (whereas you can certainly live with that, although not in luxury) plus the usual BS rethoric of "fairness, inequality, redistribution".

According to Swiss unions, minimum salaries benefit workers and governments alike. The Alpine country would save $112 million annually on social welfare payments, as the lowest-paid 10 percent of workers receive public aid.

“Taxpayers are paying for employers that pay low wages, because they pay salaries that people cannot live off of, so they have to go on welfare,” says Kelley...

I wonder how many union workers were holding picket signs, knowing full well that their "middle class" wage is baselined off of minimum wage. If unions are only making $30 an hour, and the minimum wage is $25, next contract negotiation "we are only making $5 more than minimum wage".

Perhaps it's Switzerland that is the greatest nation on earth. These would appear to be the actions of an educated populace. Let's see how things play out. After all, this measure was put to a vote in the first place.

Most Swiss voted against it as it's a non-issue, most people already make more that that: at most supermarkets the entry wage is $4000.

Some additional info: it's mostly temp workers who make less, and they are practically never Swiss: they work in hotels and restaurants during the tourist seasons, a sector that has been hurt by the high Swiss Franc.

Sure, the Swiss don't like the government to meddle in things they can decide for themselves, but they also know very well when a policy will hurt the Swiss economy.

PS There also was a vote against church taxes today: up to now companies pay around 5% church tax - but the vote was not in favor of the proposal, so, companies keep paying the church tax. Part of income tax is also a church tax. To be fair, if you claim you're not religious you don't have to pay the church tax. Still, it's something most Americans would be 1000% against...

Before anyone gets too excited about free markets remember that Switzerland does have minimum wage laws. They voted down a large increase. They did not vote out minimum wages.

I submit on the moral side of the argument that governments have no standing in wage negotiations. If you own yourself then government has no day in what you can decide to work for. It can be as much or as little as you like. You also have the right to be unemployed if you ask for more than you can produce.

On the other side, the government does not own the business and is not responsible to owners or stockholders for results. The government can demand a minimum wage that bankrupts the business or forces it to move production overseas. We know both happen regularly.

So, the government has no standing on either the labor or the business side. It does not own either side therefore has no moral right to make demands or control the private contracts that will be formed.

Real democracy at work here. The Swiss are mature enough to make wise decisions. They erlier even rejected a proposal to have more holidays but they realised that that would not be beneficial to the economy. I think they also voted against the construction of minarettes at mosques. Pretty smart folks there in CH.